Photo/Illutration Tatsufumi Sakai, left, president of Mizuho Financial Group Inc., and Koji Fujiwara, chief executive of Mizuho Bank, hold a news conference in August after computer glitches led to the suspension of bank operations. (Toshiyuki Hayashi)

Executives at Mizuho Financial Group Inc. and Mizuho Bank have decided to step down to take responsibility for a series of computer system glitches that rocked bank operations and hampered customer access to services.

The move comes with the Financial Services Agency poised to issue a second business-improvement order to the bank by the end of November.

Sources said when the regulator issues the order, it is expected to include instructions to clarify the responsibility of management for eight separate computer glitches this year alone, including one incident where ATMs gobbled up customer bank cards.

Mizuho officials apparently felt there would be no getting around the resignation of Tatsufumi Sakai as president of the group and Koji Fujiwara as chief executive of Mizuho Bank.

The FSA issued a rare business-improvement order in September while it was still in the middle of investigating the company’s computer problems.

As the investigation continued, FSA officials reached a stern conclusion of what was fundamentally behind the rash of glitches: management’s failure to recognize potential risks to the bank’s computer system, an inadequate oversight structure, and governance issues that fostered complacency and prevented leadership from emerging to fix the problems in the bank’s corporate culture.

According to sources, Mizuho Financial Group’s nominating committee is expected to meet soon to decide on when the actual change of executives will take place and who should replace the departing leaders.

Some within Mizuho want the change in command to take place next spring, after the group compiles its measures to prevent a recurrence of the computer problems after it receives the business-improvement order.

According to sources, the FSA has concluded that management must be held accountable because during its investigation it uncovered moves to reduce the number of staff handling computer system issues.

It also uncovered new suspicions of possible violations of the Foreign Exchange and Foreign Trade Control Law regarding transactions attempted when a computer glitch delayed the processing of foreign currency transactions in September.

Sakai became president of Mizuho Financial Group in April 2018, an unusual move after serving as president of Mizuho Securities Co., a group company. Sakai pushed a corporate downsizing agenda, which included cutting staff and integrating or closing bank branches.

While the financial group’s balance sheet improved, the series of computer glitches prompted calls within the company for Sakai to take responsibility.

Mizuho Bank has long been plagued by computer problems, with major glitches occurring in 2002 and 2011. On both occasions, the FSA issued business-improvement orders. After the 2011 glitch, Satoru Nishibori took responsibility and resigned as Mizuho Bank president.

(This article was written by Eisuke Eguchi and Kuniaki Nishio.)